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The digital SLR market is fiercely competitive, with the biggest sales and fattest profits in the hotly-contested consumer/entry-level area. Up until very recently Canon, the first company to break the sub-£1,000 barrier with its popular EOS 300D model in 2003, had a commanding lead in DSLR sales with a market share approaching 50 percent, following up the success of the 300D with the EOS 350D and 400D. However holding on to a lead in such a fast-moving game is as much about marketing and strategy as about making quality products, and over the past year Canon has seen its lead eaten away by its main rivals Pentax, Olympus, Sony and especially Nikon. It's not so much that the rivals are making better cameras than Canon, but more that they are offering the right products at the right prices.

In the crucial entry-level area of the market Canon has been relying on the continued popularity of the EOS 400D, a 10.1-megapixel model launched nearly two years ago and still selling well. However the 400D costs around £400 with an 18-55mm kit lens, which is starting to look like a lot of money for an aging model.

Nikon meanwhile has launched a three-pronged assault on the entry-level sector, with the 6.1MP D40 still available at around £280, the new 10.2MP D60 at around £380 and the superb D80 at around £600. Sony is continuing to carve itself a bigger share of the market with the Alpha A200, a bit of a bargain at £270 including lens, and the A350 with its advanced live view AF system and tilting monitor at around £450. Pentax has the weather-sealed K200D at around £450 while Olympus is also after the bargain hunters with its excellent E-420 at around £360. Faced with competition like that Canon must be worried that its once dominant market position isn't looking as unassailable as it used to.

Earlier this year Canon announced the launch of a new consumer digital SLR, the EOS 450D. It features a new 12.2-megapixel CMOS sensor, a larger 3-inch monitor with Live View mode, nine-point AF system and 3.5fps continuous shooting. What is perhaps surprising is the price, because the EOS 450D costs around £440 body only or around £500 with an 18-55mm image-stabilised lens. Canon has subsequently announced an even newer lower-spec entry-level camera, the EOS 1000D which we'll be reviewing next week, but even this model is currently around £500 on pre-order. Is Canon in danger of pricing itself out of one of its core markets?